Silicon Motion Technology Corporation (NasdaqGS: SIMO) (“Silicon Motion” or the “Company”) today announced its financial results for the quarter ended March 31, 2018. For the first quarter, net sales decreased 4% sequentially to $130.3 million from $136.2 million in the fourth quarter 2017. Net income (GAAP) increased to $23.1 million or $0.64 per diluted ADS (GAAP) from a net income (GAAP) of $9.8 million or $0.27 per diluted ADS (GAAP) in the fourth quarter 2017.

For the first quarter, net income (non-GAAP) decreased to $25.6 million or $0.71 per diluted ADS (non-GAAP) from a net income (non-GAAP) of $28.4 million or $0.79 per diluted ADS (non-GAAP) in the fourth quarter 2017.

Embedded Storage comprises primarily eMMC and SSD controllers and data center and industrial SSD solutions.

First Quarter 2018 Review

“In the first quarter, sales of our client SSD controllers continued to grow sequentially, and importantly also grew year-over-year,” said Wallace Kou, President and CEO of Silicon Motion.  “In addition, our eMMC controller sales grew as our NAND flash partner rebuilt inventory while our Ferri and Shannon SSD solutions sales declined seasonally.”

During the first quarter, we had $3.6 million of capital expenditures for the routine purchase of software, design tools and other items.

Returning Value to Shareholders

On October 24, 2017, the Board of Directors of the Company declared a $1.20 per ADS annual dividend to be paid in quarterly installments of $0.30 per ADS. On February 27, 2018, we paid $10.8 million to shareholders as the second installment of our annual dividend.  

On August 1, 2017, the Company announced that its Board of Directors had authorized a new program for the Company to repurchase up to $200 million of its ADS over a 12 month period.  In the first quarter, the Company did not repurchase any of its ADS.

Business Outlook

"We believe our business outlook is increasingly more favorable, especially for our client SSD controller sales,” said Wallace Kou, President and CEO of Silicon Motion. “We currently have over 80% more client SSD controller projects with our NAND flash partners than at this time a year ago and currently anticipate our SSD controller sales to grow at least 20% for the full year.”